Shares of HP
(HPQ) - Get Report fell Monday 1.9% to $18.72 after an analyst from UBS downgraded the personal computer company to neutral from buy and cut his price target to $20 from $26 a share.

Analyst John Roy wrote in a note to investors that the downgrade comes ahead of a tough year for personal computers and printer supplies, noting that he did not see printer supplies growing over the next 18 months.

The industry is in a secular decline and the long-term growth depends on the ability to gain market share, Roy wrote.

"We see downside risk to printing supplies expectations of flat in F20 as visibility is low and macro remains uncertain (we model 1% decline)," Roy said. "PC margin would likely decline greater than consensus as HP would have to pass through the component price declines and mix shifts away from commercial. CEO transition creates some additional uncertainty."

In August, HP said CEO Dion Weisler would be stepping down "due to a family health matter" and will be succeeded by Enrique Lores, who is currently president of HP's printer division. Lores will officially begin as CEO on Nov. 1.

"The good times for PCs look to be ending," Roy wrote. "We expect a 60bps margin decline in F20. FQ3 PC op. margin of 5.6% was the highest in 7+ years, benefiting from material decline in memory prices. We expect HP to pass some of these savings to customers. Pricing pressure is expected to increase in 4Q and, as such, margins are unlikely to be sustained above 5%."

This was the second downgrade to hit the Palo Alto, Calif.-based company in as many weeks. Last week, the computer and printer giant was downgraded to market perform from outperform by Bernstein Research. The report said HP's printing unit faces "greater structural headwinds," thanks to the shift to digital.